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fundamentally flawed. See www.
webcpa.com/article.cfm?articleid=9747 for the 2005 article.
Modern accounting was born
centuries ago when the only method
of recording business transactions
was pen on paper. Fourteenth cen-
tury Italian merchants are credited
with developing double-entry book-
keeping, the system of recording
each business transaction twice
thats still used today. Ledgers were
heavy books that recorded all signif-
icant entries of a business. At the
close of business, the ledgers were
summarized into a general ledger,
and financial statements were
preparednot very different from
whats done today.
A quick peek under the covers of
accounting software packages will
reveal that most are recording little
more than the same debits and cred-
its that were hand-written into the
books of the merchants of Venice.Modern accounting systems record
transactions into relational databases
that smooth the way for quick re-
trieval of the data for further process-
ing. But this improvement doesnt
address the problem of naked data
in our accounting systems.
Naked data occurs when an ac-
counting application strips away or
fails to collect the supporting infor-
mation from a business transaction
that could lead to a richer, fuller ex-
planation of that transaction. Con-
sider that most modern accounting
applications allow for documenta-
tion of transactions natively within
the applications. Once pulled out-
side the application by query or by
a report writer, however, the data is
typically stripped of all support ing
information and becomes just a
number. Analysis of the how and
why for a particular number on a
subsequent financial report be-
comes an exercise of going back to
the original software application
and hoping that enough identifying
information still exists inside the
application. Accounting applica-
tions tend to keep supporting data
in ways that are unique to each ap-
plication, complicating both the
business reporting process and sub-sequent internal control and audit
routines.
Introducing XBRL GL 2005
Fortunately, a new method of repre-
senting what is found in the data-
bases of accounting and operational
systems that keeps the exact content
while allowing fully clothed data to
pass outside the system is finally
here. Currently under review as a
public working draft, XBRL GL 2005
is a series of tags organized in a
modular set (or taxonomy). Accord-
ing to the XBRL International web-
site (www.xbrl.org), XBRL GL 2005
was developed to provide a stan-
dardized format for representing the
data fields found in transactional re-
ports and accounting and opera-
tional systems that allows organiza-
XBRL
XBRL GL: TheGeneral LedgerGets Its Groove | B Y N E A L J . H A N N O N
Neal Hannon, Editor
September 2005 | STRATEGIC FINANCE 5 7
Each year,Accounting Today publishes a list of thetop 100 technology products for accounting. Although
the list contains several broad categories of software
that helps businesses get their work done, the fact that
so many different choices are available is evidence that
the accounting market is very diverse, robust, and
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tions to tag journal entries, account-
ing master files, and historical status
reports in XBRL. The modular set
consists of the COR (Core), the BUS
(Advanced Business Concepts),
MUC (Multicurrency), USK (con-
cepts for the U.S. and U.K.), andTAF (tax audit file) modules. See
www.xbrl.org/int/gl/2005-07-12/
gl-2005-07-12.htm for a more de-
tailed description.
According to the XBRL Interna-
tionals GL working group, XBRL GL
is based on the model of a sophisti-
cated accounting systems General
Ledger journal history file, into
which all of the detail from all of the
sub-ledgers may flow. XBRL GL is a
generic representation of the docu-
ments, parties, resources, events, and
other details that start at the transac-
tion level and flow in full detail or
summary to the Ledger.
XBRL GL 2005 is the most sig-
nificant improvement to the gener-
al ledger since manual bookkeep-
ing moved to the database model.
Why?
q With XBRL GL, significant
business report ing data is enriched
with meta data or information about
the data that is never separated from
the original transaction. This facili-
tates the creation of an automated
audit trail and eases the reuse of the
data in modern business reporting
models, such as dashboard business
process monitor ing systems.
q Because of its ability to univer-
sally represent general ledger entries
from various international applica-tions, XBRL GL can act as a natural
middleware for disparate application
data to be fed naturally into a com-
mon program. For example, the
Japanese company Wacoal (see
Breathing New Life into Old Sys-
tems, Strategic Finance, March
2004) utilized XBRL GL as the
method for feeding data from sever-
al different legacy systems into
Oracle Financials.
q Companies that need to con-
solidate data from different coun-
tries may find that not everyone
stores required information exactly
the same way or in the same place.
XBRL GL tagged data can work with
the data regardless of where the dis-
parate information is stored and
easily import the data into a new
general ledger.q XBRL GL has been designed to
act as both an audittool, with the
ability to represent information as
originally stored in the system, and
as a data exchange format, with stan-
dard lists of terms for the most im-
portant interchange concepts to pro-
mote consistency and automated
machine consumption.
At the July 2005 XBRL-US con-
sortium meeting in Arlington, Va.,
Gianluca Garbellotto, XBRL busi-
ness manager for DynAccSys, LLC,
gave a presentat ion about a pro-
posed use of XBRL GL within the
federal governments Department of
Housing and Urban Development
(HUD). The DynAccSys demo
showcased how XBRL GL output
could be consumed and analyzed
with Business Objectsquery, re-
porting, and analysis tool for the
desktop, matching the needs of
HUD. The design criteria for the
HUD project include:
q Link downstream information
and reporting requirements with
transaction data;q Accept standard information to
and from other internal, govern-
ment, or private-sector sources;
q Provide one-time data entry;
and
q Be modular in design and built
with reusability as an objective.
Given these criteria, XBRL GL is a
clear favorite to fill the need at
HUD. XBRL GL has pioneered the
development of standard methods of
recording, storing, sharing, and re-
porting accounting-significant trans-
actional data in an open-source
environment.
Why do standards make a differ-
ence? They improve communication
at all levels, especially between dif-
ferent computer applications. The
sharing of business report ing infor-
mation between systems both insideand outside an organization is
greatly simplified by the use of a
common translator such as XBRL
GL. IMA has been and will continue
to be a strong advocate for XBRL
GL as an enabler to enterprise busi-
ness report ing and will be hosting
a webinar on this topic in the fall.
Details will be announced next
month. s
Neal Hannon is an accounting lectur-
er for the Barney School of Business at
the University of Hartford. Author of
two books and numerous articles, he is
the IMAs representative to the XBRL
International consortium. Hannon is
a former member of the XBRL-US
steering committee and former chair
of XBRL Internationals Education
Committee.
5 8 STRATEGIC FINANCE I September 2005
DID YOU KNOW? XBRL GL doesnt
require a company to change the way it
represents data internally, but it provides
a guide to help developers consider what
needs to be captured and exchanged.
Flick a switch on an external reporting
tool, and every system will look similar to
the builders of reporting tools and con-
solidation tools and to any other software
builders who need to use the data.
Source: XBRL GL Working Group, XBRL GL:
Whats in it For Me?